Final answer:
Financial accounting primarily provides information for preparing financial statements like the income statement, which is meant for shareholders and other external parties. It also helps companies track and report financial performance to assist in deciding how to raise financial capital.
Step-by-step explanation:
Financial accounting provides the primary source of information for various stakeholders, but when it comes to the specific options provided, the correct answer is C) preparing the income statement for shareholders and other external parties. Financial accounting involves the preparation of financial statements such as the balance sheet, income statement, and cash flow statement, which are essential for investors, creditors, and the public to assess a company's financial performance and make informed decisions.
When firms need to raise financial capital, they have several options to consider: obtaining funds from early-stage investors, reinvesting profits, borrowing through banks or bonds, and selling stock. The choice among these sources involves weighing factors like control over the company, the need to make scheduled interest payments, and providing future profits to investors.